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2024 (1) TMI 985 - HC - SEBIWrit petitions impugning the Revocation Order within the territorial jurisdiction of Delhi High Court - Violation of SEBI s Minimum Public Shareholding Norms ( MPS Norms ) and disclosure requirements - SCN provided an option for settlement mechanism under the SEBI (Settlement Proceedings) Regulation, 2018 - SEBI passed a common Settlement Order as stated that certain monetary and non-monetary terms were imposed on the Appellants in the Settlement Order, and steps have been taken by the Appellants to implement the said Settlement Order - Settlement Order stood revoked and withdrawn by SEBI in terms of Regulation 28 of the Regulations of 2018 on the ground of alleged failure of the Appellants to comply with the terms of the Settlement Order. HELD THAT - The conclusion that the cause of the action of the Appellants to challenge the legality of the Impugned Revocation Order issued by SEBI at Mumbai has no nexus with the receipt of the said order at Delhi; as this is not the material or integral fact to the said cause of action. The Impugned Revocation Order was admittedly received by the Appellants in multiple jurisdictions and this fact if held to be determinative would enable Appellants to pick and choose jurisdictions which is the mischief that the Full Bench of Kerala High Court has opined should not be permitted and we agree with the same. Therefore, the receipt of the Impugned Revocation Order at Delhi cannot alone be held determinative of the jurisdiction of this Court. Effect of the Impugned Revocation Order felt at Mumbai - grievance of the Appellants in the writ petitions is that the issuance of the Impugned Revocation Order of SEBI has resulted in re-initiation of the proceedings and hearing at Mumbai pursuant to the SCN dated 28.10.2020; thereby exposing the Appellants to regulatory proceedings - It is the facts pleaded in the grounds, which constitute the material and integral facts, which the Appellants will have to prove, if traversed by SEBI, to seek a judgment of the Court. The challenge to the Impugned Revocation Order has been raised on the grounds of inter-alia non-adherence to the principles of natural justice by SEBI. It has been pleaded that the SEBI failed to provide the Appellants an opportunity of hearing prior to revocation and the order is unreasoned. It is further pleaded that the impugned order is contrary to the extant law. It is the facts pleaded in these grounds which would constitute the cause of action in favour of the Appellants herein. A bare perusal of the grounds would show that each one of them allege acts and omissions by SEBI at Mumbai. Therefore, in our considered opinion as per the grounds set out in the writ petition the cause of action for challenging the impugned order against SEBI has arisen at Mumbai. In the facts pleaded by the Appellants for invoking the writ jurisdiction of the Courts at Delhi, undoubtedly, it cannot be said that the High Court of Delhi had no territorial jurisdiction for admittedly, the Appellants reside within the jurisdiction of this Court. However, none of the facts pleaded by the Appellants for invoking the jurisdiction of this Court are integral and material fact for challenging the Impugned Revocation Order. The said facts are not sufficient for compelling this Court to hear the matter on merits. For the same reason, the contention of the situs of shares of BNL is not an integral fact. Forum Conveniens at Mumbai - In the facts of this case, admittedly the High Court of Judicature at Bombay has the jurisdiction as the decision of SEBI to revoke the Settlement Order took place at Mumbai and all events prior thereto with respect to issuing the SCN and passing of the Settlement Order also occurred at Mumbai. The High Court while exercising its jurisdiction under Article 226 of the Constitution of India to entertain a writ petition, in addition to examining its territorial jurisdiction also examines if the said Court is the forum conveniens to the parties. The issue of forum conveniens is seen not only from the perspective of the writ petitioner but it is to be seen from the convenience of all the parties before the Court. In the facts of this case, as is evident from the record that the forum conveniens for the both the parties is Mumbai. The Appellants since the year 2020 have been appearing in Mumbai before SEBI. This Court is of the view that the learned Single Judge has rightly concluded that applying the principles of forum conveniens, it would not be appropriate to entertain the writ petitions and the Appellants may approach the appropriate High Court. Summoning of the record of the SEBI would be necessary for examining the rival contentions of the parties in the writ petition.
Issues Involved:
1. Jurisdiction of the High Court under Article 226 of the Constitution of India. 2. Application of the principle of forum conveniens. 3. Material and integral facts constituting the cause of action. 4. Effect of the Impugned Revocation Order and SEBI's actions. Summary: Jurisdiction of the High Court under Article 226 of the Constitution of India: The appeals challenged the judgment dismissing the writ petitions on the ground that the integral, essential, and material part of the cause of action arose within the territorial jurisdiction of the High Court of Judicature at Bombay, not the Delhi High Court. The learned Single Judge held that even if a slender part of the cause of action arose within the jurisdiction of the Delhi High Court, it would not be appropriate to entertain the writ petitions applying the principles of forum conveniens. Application of the principle of forum conveniens: The Court upheld the learned Single Judge's decision, emphasizing that the principle of forum conveniens considers the convenience of all parties. The Appellants had been participating in proceedings at Mumbai since 2020, and the SEBI's actions, including the issuance of the Impugned Revocation Order, took place in Mumbai. Therefore, Mumbai was deemed the appropriate forum for the dispute. Material and integral facts constituting the cause of action: The Appellants argued that the receipt of the Impugned Revocation Order at their registered offices in New Delhi, the effect felt in New Delhi, and the pending writ petition (W.P.(C) No. 10756/2019) in the Delhi High Court constituted material facts for jurisdiction. However, the Court found these facts insufficient to constitute a material, essential, or integral part of the cause of action. The cause of action primarily arose in Mumbai, where SEBI's actions and the settlement process occurred. Effect of the Impugned Revocation Order and SEBI's actions: The Court noted that the Impugned Revocation Order led to the revival of SCN proceedings at Mumbai, which affected the Appellants. The material facts leading to the challenge of the Impugned Revocation Order were tied to SEBI's actions in Mumbai. Consequently, the effect of the order was felt in Mumbai, reinforcing the appropriateness of the Bombay High Court as the forum conveniens. Conclusion: The Delhi High Court dismissed the appeals, affirming the learned Single Judge's decision that the High Court of Judicature at Bombay was the appropriate forum for the dispute, applying the principles of forum conveniens and considering the material and integral facts constituting the cause of action. The registered offices of the Appellants in New Delhi and the receipt of the Impugned Revocation Order in New Delhi were not deemed sufficient to confer jurisdiction on the Delhi High Court.
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